The results of detailed numerical studies of phenomena in negative com
pressibility turbulence with sheared perpendicular (i.e., poloidal) fl
ow are presented. The turbulence model is based on the parallel ion fl
ow gradient instability, a representative paradigm for ion drift waves
. Studies of coupled turbulence and mean flow evolution indicate the e
xistence of two distinct nonlinear states. In the first state, saturat
ion occurs via nonlinear transfer to damped high-k modes and sheared f
low is heavily damped. In the second state, the turbulence level is co
ntrolled by the self-consistently generated sheared flow. Transition b
etween these states is determined by the competition between instabili
ty growth and damping of rotation. The dynamics of the observed transi
tion is well described and consistent with a simple set of coupled env
elope equations. Modulational interaction between small scale turbulen
ce and large scale m not-equal 0 shear flows is observed, as well.